Study: Medicaid expansion a boon to Ohio at first

Savings expected to drop as costs increase

Published 5:10 PM EST Jan 15, 2013

COLUMBUS, Ohio -

Ohio stands to make $1.4 billion over the next decade by expanding Medicaid under the Affordable Care Act, but the savings would eventually drop and just about break even as the state's costs increase, according to a study released Tuesday.

The findings released by the Health Policy Institute of Ohio, a nonpartisan policy organization, comes just weeks before Ohio Gov. John Kasich is to announce whether Ohio will expand Medicaid and its health care services for poor and disabled people.

Under the federal health care law, states have the option to expand Medicaid. Ohio officials are weighing the long-term impact and potential costs of expanding Medicaid against the possible savings.

The institute's report found nearly a half-million uninsured Ohioans would get coverage by 2022, at which point the payments by the federal government would have tapered down.

The analysis says Ohio would save money in 2014 because the federal government would pay a much higher share of Medicaid costs for newly eligible adults. The state also would see an increase in sales and health insurance tax revenues, the report said.

It estimates that Ohio would net $104 million in the first year, rising to $328 million in 2016. After that, the state would begin paying for the expansion and see the amounts it makes fall as well.

Medicaid expansion would essentially be paying for itself by 2022, but it would no longer be bringing in huge sums for the state either, the report said.

For states deciding to make Medicaid available to more people, the federal government will cover 100 percent of the cost of the first three years of the expansion, gradually phasing down to a 90 percent share – still more than states have traditionally received.

The study estimated that 456,000 uninsured Ohioans just above and below the poverty line would gain health care under the expansion.

The group releasing the report said it would not say whether it thought Ohio should expand Medicaid.

"Our intention was to look at this from as many angles as we could," said Amy Rohling McGee, president of the Health Policy Institute of Ohio, who cautioned that numbers in the report are projections and could change slightly.

"This analysis is not inconsistent with what we have heard from the wave of hospitals and other stakeholders that have been urging the state to expand Medicaid," said Eric Poklar, of the governor's Office of Health Transformation. "We will continue to review all of the data at our disposal and feedback from stakeholders, both for and against, and recommend in the budget a course of action that is best for Ohio."

Kasich plans to make known his decision on whether to expand Medicaid when he releases his next budget on Feb. 4.

Copyright 2013 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.